View Full Version : For God' Sake, Stop the Aid!
I've heard this argument (http://www.spiegel.de/international/spiegel/0,1518,363663,00.html) many times, but never from an African. Interesting stuff. As a free marketer, I'm naturally inclined to agree with Mr. Shikwati, but it's a good idea to pull back slightly from anything that confirms your beliefs too neatly.
Okay, so aid to Africa has been grossly mishandled, but is it really at the root of the stunted markets there? Isn't corruption and bad government more of an issue? Would it be possible for a form of aid to exist that did not stunt local markets and producers?
And what's the upshot of a thriving economy if there's no rule of law? Say I become a very successful farmer in a kleptocracy -- what's to stop the government from taking my hard-won profits away and giving them to a relative of the Presidente? Lots to think about ...
"For God's Sake, Please Stop the Aid!"
The Kenyan economics expert James Shikwati, 35, says that aid to Africa does more harm than good. The avid proponent of globalization spoke with SPIEGEL about the disastrous effects of Western development policy in Africa, corrupt rulers, and the tendency to overstate the AIDS problem.
SPIEGEL: Mr. Shikwati, the G8 summit at Gleneagles is about to beef up the development aid for Africa...
Shikwati: ... for God's sake, please just stop.
SPIEGEL: Stop? The industrialized nations of the West want to eliminate hunger and poverty.
Shikwati: Such intentions have been damaging our continent for the past 40 years. If the industrial nations really want to help the Africans, they should finally terminate this awful aid. The countries that have collected the most development aid are also the ones that are in the worst shape. Despite the billions that have poured in to Africa, the continent remains poor.
SPIEGEL: Do you have an explanation for this paradox?
Shikwati: Huge bureaucracies are financed (with the aid money), corruption and complacency are promoted, Africans are taught to be beggars and not to be independent. In addition, development aid weakens the local markets everywhere and dampens the spirit of entrepreneurship that we so desperately need. As absurd as it may sound: Development aid is one of the reasons for Africa's problems. If the West were to cancel these payments, normal Africans wouldn't even notice. Only the functionaries would be hard hit. Which is why they maintain that the world would stop turning without this development aid.
SPIEGEL: Even in a country like Kenya, people are starving to death each year. Someone has got to help them.
Shikwati: But it has to be the Kenyans themselves who help these people. When there's a drought in a region of Kenya, our corrupt politicians reflexively cry out for more help. This call then reaches the United Nations World Food Program -- which is a massive agency of apparatchiks who are in the absurd situation of, on the one hand, being dedicated to the fight against hunger while, on the other hand, being faced with unemployment were hunger actually eliminated. It's only natural that they willingly accept the plea for more help. And it's not uncommon that they demand a little more money than the respective African government originally requested. They then forward that request to their headquarters, and before long, several thousands tons of corn are shipped to Africa ...
SPIEGEL: ... corn that predominantly comes from highly-subsidized European and American farmers ...
Shikwati: ... and at some point, this corn ends up in the harbor of Mombasa. A portion of the corn often goes directly into the hands of unsrupulous politicians who then pass it on to their own tribe to boost their next election campaign. Another portion of the shipment ends up on the black market where the corn is dumped at extremely low prices. Local farmers may as well put down their hoes right away; no one can compete with the UN's World Food Program. And because the farmers go under in the face of this pressure, Kenya would have no reserves to draw on if there actually were a famine next year. It's a simple but fatal cycle.
SPIEGEL: If the World Food Program didn't do anything, the people would starve.
Shikwati: I don't think so. In such a case, the Kenyans, for a change, would be forced to initiate trade relations with Uganda or Tanzania, and buy their food there. This type of trade is vital for Africa. It would force us to improve our own infrastructure, while making national borders -- drawn by the Europeans by the way -- more permeable. It would also force us to establish laws favoring market economy.
SPIEGEL: Would Africa actually be able to solve these problems on its own?
Shikwati: Of course. Hunger should not be a problem in most of the countries south of the Sahara. In addition, there are vast natural resources: oil, gold, diamonds. Africa is always only portrayed as a continent of suffering, but most figures are vastly exaggerated. In the industrial nations, there's a sense that Africa would go under without development aid. But believe me, Africa existed before you Europeans came along. And we didn't do all that poorly either.
SPIEGEL: But AIDS didn't exist at that time.
Shikwati: If one were to believe all the horrorifying reports, then all Kenyans should actually be dead by now. But now, tests are being carried out everywhere, and it turns out that the figures were vastly exaggerated. It's not three million Kenyans that are infected. All of the sudden, it's only about one million. Malaria is just as much of a problem, but people rarely talk about that.
SPIEGEL: And why's that?
Shikwati: AIDS is big business, maybe Africa's biggest business. There's nothing else that can generate as much aid money as shocking figures on AIDS. AIDS is a political disease here, and we should be very skeptical.
SPIEGEL: The Americans and Europeans have frozen funds previously pledged to Kenya. The country is too corrupt, they say.
Shikwati: I am afraid, though, that the money will still be transfered before long. After all, it has to go somewhere. Unfortunately, the Europeans' devastating urge to do good can no longer be countered with reason. It makes no sense whatsoever that directly after the new Kenyan government was elected -- a leadership change that ended the dictatorship of Daniel arap Mois -- the faucets were suddenly opened and streams of money poured into the country.
SPIEGEL: Such aid is usually earmarked for a specific objective, though.
Shikwati: That doesn't change anything. Millions of dollars earmarked for the fight against AIDS are still stashed away in Kenyan bank accounts and have not been spent. Our politicians were overwhelmed with money, and they try to siphon off as much as possible. The late tyrant of the Central African Republic, Jean Bedel Bokassa, cynically summed it up by saying: "The French government pays for everything in our country. We ask the French for money. We get it, and then we waste it."
SPIEGEL: In the West, there are many compassionate citizens wanting to help Africa. Each year, they donate money and pack their old clothes into collection bags ...
Shikwati: ... and they flood our markets with that stuff. We can buy these donated clothes cheaply at our so-called Mitumba markets. There are Germans who spend a few dollars to get used Bayern Munich or Werder Bremen jerseys, in other words, clothes that that some German kids sent to Africa for a good cause. After buying these jerseys, they auction them off at Ebay and send them back to Germany -- for three times the price. That's insanity ...
SPIEGEL: ... and hopefully an exception.
Shikwati: Why do we get these mountains of clothes? No one is freezing here. Instead, our tailors lose their livlihoods. They're in the same position as our farmers. No one in the low-wage world of Africa can be cost-efficient enough to keep pace with donated products. In 1997, 137,000 workers were employed in Nigeria's textile industry. By 2003, the figure had dropped to 57,000. The results are the same in all other areas where overwhelming helpfulness and fragile African markets collide.
SPIEGEL: Following World War II, Germany only managed to get back on its feet because the Americans poured money into the country through the Marshall Plan. Wouldn't that qualify as successful development aid?
Shikwati: In Germany's case, only the destroyed infrastructure had to be repaired. Despite the economic crisis of the Weimar Republic, Germany was a highly- industrialized country before the war. The damages created by the tsunami in Thailand can also be fixed with a little money and some reconstruction aid. Africa, however, must take the first steps into modernity on its own. There must be a change in mentality. We have to stop perceiving ourselves as beggars. These days, Africans only perceive themselves as victims. On the other hand, no one can really picture an African as a businessman. In order to change the current situation, it would be helpful if the aid organizations were to pull out.
SPIEGEL: If they did that, many jobs would be immediately lost ...
Shikwati: ... jobs that were created artificially in the first place and that distort reality. Jobs with foreign aid organizations are, of course, quite popular, and they can be very selective in choosing the best people. When an aid organization needs a driver, dozens apply for the job. And because it's unacceptable that the aid worker's chauffeur only speaks his own tribal language, an applicant is needed who also speaks English fluently -- and, ideally, one who is also well mannered. So you end up with some African biochemist driving an aid worker around, distributing European food, and forcing local farmers out of their jobs. That's just crazy!
SPIEGEL: The German government takes pride in precisely monitoring the recipients of its funds.
Shikwati: And what's the result? A disaster. The German government threw money right at Rwanda's president Paul Kagame. This is a man who has the deaths of a million people on his conscience -- people that his army killed in the neighboring country of Congo.
SPIEGEL: What are the Germans supposed to do?
Shikwati: If they really want to fight poverty, they should completely halt development aid and give Africa the opportunity to ensure its own survival. Currently, Africa is like a child that immediately cries for its babysitter when something goes wrong. Africa should stand on its own two feet.
Interview conducted by Thilo Thielke
Translated from the German by Patrick Kessler
Marshal Murat
06-07-2007, 15:18
I would
Agree and Disagree...
It's practically communism where they are given money for being 'poor exploited Africans'.
I disagree, with the example being Somalia. The aid that was distributed did give the people food and helped them.
My understanding was that Somalia, like most famines, was man-made. There was plenty of food in the country. So yeah, we fed starving people, and how can that be bad, but how much of the food we sent was stolen by militias? How much was put on the market to depress local prices?
I don't know, nothing ever seems simple with Africa ...
doc_bean
06-07-2007, 15:29
"Trade not aid !" has been the cry of thousands of intellectuals and specialists when it concerns Africa, unfortunately, no one is listening.
I do believe some aid can be beneficial, mostly medicine, support for education and infrastructure, micro-loan programs, etc. But a lot of the aid money just gets used by the governments to either fill their own bank accounts or to support their military infrastructure.
I fear things have to get worse in Africa before they're going to get better.
Don Corleone
06-07-2007, 15:39
It makes perfect sense, that by sending grain or clothing, we depress the already weakened textile and agriculture markets. How much money can they hope to earn when we keep showing up to give it all away?
The problem with ending aid in favor of trade however is one of urgency. Yes, long term we should be working to develop stable markets over there. But right now, if we took a 'trade not aid' posture, exclusively, hundreds of thousands would starve to death within the year.
We need both: short term, urgent care where we make certain those in jeoprady of starving to death have food, shelter and clothing. That's why I donate to WorldVision. But we also need to see to it that we're developing indigenous industries and markets. That's why I donate to Project Heifer (a more long term, economic based approach).
doc_bean
06-07-2007, 15:52
It makes perfect sense, that by sending grain or clothing, we depress the already weakened textile and agriculture markets. How much money can they hope to earn when we keep showing up to give it all away?
The problem with ending aid in favor of trade however is one of urgency. Yes, long term we should be working to develop stable markets over there. But right now, if we took a 'trade not aid' posture, exclusively, hundreds of thousands would starve to death within the year.
We need both: short term, urgent care where we make certain those in jeoprady of starving to death have food, shelter and clothing. That's why I donate to WorldVision. But we also need to see to it that we're developing indigenous industries and markets. That's why I donate to Project Heifer (a more long term, economic based approach).
Well, the solution is rather simple: instead of dumping our own agricultural products there we should use the money to first buy (up) their products and then supplement them with our own if necessary. Essentially: giving money (aid) to people in function of how much they produce, on top of a 'minimum' of aid. We don't even need to actually buy their products, just give them money for putting it on the market.
And stop exporting our subsidized crap at such a low cost. Of course, that's long since been known and countered by the World Bank and its European equivalent. How 'blackmail' countries into opening their borders so we can continue to dump on their markets. Ghana (I believe) tried to resist them once, but the WB cut off all funding so the government (who probably gets most benefits from the aid) caved and re-opened the borders.
Or they could just consider us dumping our goods as a blessing in disguise and start farming other crops, they have rich enough ground for just about everything. They can't grow it for that amount money, make it as difficult as you want it to be. We should keep dumping our surpluss, and teach them how to grow other things.
Ser Clegane
06-07-2007, 16:29
and teach them how to grow other things.
Such as?
doc_bean
06-07-2007, 16:43
There's a limit to how food the average person needs.
Somehow i also suspect we'd cut food aid if they'd just use it all to feed animals (for meat) and then they're right back to start.
They won't get trade rather than aid. Aid is easy, it makes people feel good and governments look good.
Trade would, to a large extent, require the end of subsidies and other protections given to Africa's competitors.
The EU's Common Agricultural Policy would have to go for a start, and sadly (for everyone, not just Africans) that isn't likely to happen.
I've heard this argument (http://www.spiegel.de/international/spiegel/0,1518,363663,00.html) many times, but never from an African. Interesting stuff. As a free marketer, I'm naturally inclined to agree with Mr. Shikwati, but it's a good idea to pull back slightly from anything that confirms your beliefs too neatly.
Okay, so aid to Africa has been grossly mishandled, but is it really at the root of the stunted markets there? Isn't corruption and bad government more of an issue? Would it be possible for a form of aid to exist that did not stunt local markets and producers?
And what's the upshot of a thriving economy if there's no rule of law? Say I become a very successful farmer in a kleptocracy -- what's to stop the government from taking my hard-won profits away and giving them to a relative of the Presidente? Lots to think about ...I agree that our "help" is the cause of many of Africa's current problems. European powers made a mess of Africa from the get-go and the West's current policies are usually counter-productive as well.
Here's a blurb from the folks at the Cato Institute:
Unfortunately, as the case of Uganda shows, foreign aid and debt relief can exacerbate Africa's problems by postponing economic reforms and the emergence of a transparent and accountable government.
Uganda implemented significant economic reforms in the 1990s because of domestic economic and political factors. That progress led many observers to label Uganda as an economic success story and brought the country debt relief and an increase in foreign aid. But foreign aid, which makes up 50 percent of the Ugandan government's budget, is providing the government with an independent source of "unearned" revenue. That allows the government to avoid accountability to Uganda's citizens. Moreover, foreign aid enables the government to pay its bills without having to undertake further necessary economic reforms.
Similarly, debt relief to Uganda has had some unintended consequences. It has enabled the government to borrow still more money and remain highly indebted by significantly increasing its level of absolute debt. The country's debt as a share of gross domestic product is still more than 50 percent. The government is wasting much of the new money on military equipment and political patronage. To promote democracy and accountability, the West should discontinue future aid flows.
Edit:
Trade would, to a large extent, require the end of subsidies and other protections given to Africa's competitors.
The EU's Common Agricultural Policy would have to go for a start, and sadly (for everyone, not just Africans) that isn't likely to happen.:yes:
My understanding was that Somalia, like most famines, was man-made. There was plenty of food in the country. So yeah, we fed starving people, and how can that be bad, but how much of the food we sent was stolen by militias? How much was put on the market to depress local prices?
I don't know, nothing ever seems simple with Africa ...
How much emergency food aid was stolen in the famine? An estimated 80% according to, cough, Wikipedia:
http://en.wikipedia.org/wiki/Operation_Restore_Hope
You are right, Somalia is a great example of where things are not simple. Aid was not enough, so we sent soldiers to guard it - turned Mogadishu into a prototype Baghdad and then bugged out to leave a country still broken. No easy answers, but I know just letting people starve is not an option for me.
I think famines nowadays are basically political problems (and hence rather intractable). But most aid is nothing to do with famines, which are fortunately rare events that only afflict a few arguably very badly run countries. Most aid is about development and poverty reduction.
Here's a blurb from the folks at the Cato Institute...
Uganda is a strange example for the Cato Institute to pick on to bash aid. This is a country:
(a) that stopped an AIDS epidemic in its tracks - circa 1990, Uganda was among the worst case for HIV/AIDS in Africa; now it is still afflicted but in better shape than richer southern African countries.
(b) that was at one time in the 1990s, the fastest growing economy in the world and as a consequence dramatically reduced absolute poverty
(c) that has introduced free primary education
(d) that has pioneered anti-poverty strategies (the World Bank’s poverty reduction strategies were inspired by Uganda’s home grown version).
(e) that cut inflation from 100%+ to 10% or so per annum and has also liberalised trade, agriculture, foreign exchange etc
(f) that has gone from expelling the key Asian business community in the 1970s to welcoming them back, with full restitution of their property in the 1990s.
(g) that has made a transition from murderous civil war to a peace and stability in 90% of its districts (the north is still blighted by the LRA).
(h) that basically has gone from being one of the worst performing African countries to being one of the models.
The fashion nowadays in aid is towards ex post conditionality - don’t give money on condition countries will do good things (if their heart isn't in it, it won't happen). Instead give money to countries that have shown they do good things. By that criterion, Uganda is about top of the list to receive aid.
More prosaically, aid finances about 2/3 of public primary health care in Uganda. Stop further aid flows and you are either going to get higher taxes or less health care, neither of which are going to be good for economic growth and survival in desperately poor Uganda.
BTW, I would not be too confused by debt statistics: with a country as dirt poor as Uganda, that’s exclusively debt borrowed from official overseas institutions, not private finance. It is basically aid and will not be repaid in practice (formally it will be repaid, but only by making new loans to pay off the old). The IMF and the World Bank constitutionally must provide loans not grants, but the key thing is the net resource flows and they are not going to go from Uganda to Washington for a very long time (ever, basically). Hence the debt forgiveness - it’s easy for the West to write off loans, because it is just a paper exercise.
Uganda is a strange example for the Cato Institute to pick on to bash aid.The statistics you point out highlight their point. They made good progress in the '90s and received more aid as a result. More aid stymied promised economic reforms and allowed the government to spend and borrow beyond its means.
The statistics you point out highlight their point. They made good progress in the '90s and received more aid as a result. More aid stymied promised economic reforms and allowed the government to spend and borrow beyond its means.
Well, I still think you are not getting my point on debt: the aid does not allow you to borrow beyond your means; the additional borrowing is the aid. International banks are not going to loan Uganda money. The only borrowing going on is concessional loans from official sources (ie aid). And the whole point of aid is precisely to allow a desperately poor country like Uganda to live beyond its means. All of sub-Saharan Africa does. Aid pays for about two-fifths of poor African countries' imports. Aid is wrapped up in the fiction that we are loaning the poorest countries money, but until they take off like China or something, the loans are effectively gifts. This is not an assertion - just a statement of fact about the last 35 years of aid to Africa. It would be better if all the parties accepted this and then budgets could be planned sensibly.
And I am not clear what promised economic reforms have been stymied in the '00s (I'm genuinely curious here).
I am not trying to hold out Uganda (or aid, for that matter) as perfect. Uganda is no miracle country and aid is not the cure for Africa's ailments. But I would rather see my taxes go in aid to Uganda than to most other uses.
Crazed Rabbit
06-08-2007, 03:55
I remember a BBC article on how the hysteria over global warming and carbon emissions from imported food in the UK was hurting poor Africans - Tesco announcing they were going to cut down on imported food meant less trade for Kenya, all because of some stupid popular hysteria.
Would it be possible for a form of aid to exist that did not stunt local markets and producers?
I don't think so.
Crazed Rabbit
CountArach
06-08-2007, 08:26
I think that Aid is a good thing, in general. However, it is important that a third-party administers it, and not the ruling Dictator/whatever. It is also not a good long-term solution to a long-term problem. As to what needs to be done in the long term:
1) Expanded Medical support - Incredibly necessary, whatever the cost. This is a human right.
2) Educational support - Especially infrastructure
3) Sharing technologies - I don't know how to achieve this, perhaps tax incentives for businesses?
4) Free Trade would be useful, however I am not sure if it would lead to a situation where these people end up working in Sweat shops.
Geoffrey S
06-08-2007, 11:02
The problem in Africa is that there are no real guarantees in most states when it comes to protection of property. At any time many governments can take over companies or stifle particular sectors due to misguided Marxist policies, let alone the damage done by so much disorder. Until there is some kind of order and protection of property, I can't see aid doing good worth the cost any time soon.
Philippus Flavius Homovallumus
06-08-2007, 12:05
This is a thorny problem because our natural inclination is to help the people now, but in reality you have to let them help themselves. To be brutally honest thousands probably need to die in Africa before the rest will wake up and smell the imported coffee. Africa is also horrendously overpopulated, especially given the climate.
It's an ancient problem to which there is no answer: how do you teach a people the value of good government without letting them suffer to achieve it?
If you want to see a classic case of failure I suggest you look up Solon of Athens.
Africa will never stand on it's own feet unless it is left alone. The best thing for us to do is stop interfereing. That or go in and actually take over and run the continent directly, that would improve quality of life, it wouldn't be right though.
i lived in east africa for many years, and i agree with what this guy says.
stop the aid, stop first world subsidies that shaft the third world.
africa would be a much better place.
Marshal Murat
06-08-2007, 15:59
But wait! there is more! (http://news.bbc.co.uk/2/hi/europe/6732945.stm)
Crazed Rabbit
06-08-2007, 16:33
1) Expanded Medical support - Incredibly necessary, whatever the cost. This is a human right.
What makes that 'incredibly necessary' - cannot they supply their own doctors? Must they not learn to provide for themselves? Or are you just ignoring the article?
And what makes it 'a human right' (to steal from others)?
Crazed Rabbit
CountArach
06-09-2007, 00:04
What makes that 'incredibly necessary' - cannot they supply their own doctors? Must they not learn to provide for themselves? Or are you just ignoring the article?
And what makes it 'a human right' (to steal from others)?
Crazed Rabbit
No, not necessarily Western Doctors, but rather infrastructure. They need the Doctors to come in and train them. They will learn to provide for themselves at that point, however we must also realise that the poor will still not be able to afford any form of Healthcare, beyond what is given to them.
As to what makes it a "Human right", the UN Declaration of Human Rights Article 3 states:
Everyone has the right to life, liberty and security of person.
So, you want to take that away from them?
Also I am wondering how you consider taking something that is freely given to be stealing?
Crazed Rabbit
06-09-2007, 04:37
No, not necessarily Western Doctors, but rather infrastructure. They need the Doctors to come in and train them. They will learn to provide for themselves at that point, however we must also realise that the poor will still not be able to afford any form of Healthcare, beyond what is given to them.
Replace doctors with food and you've got exactly what this guy is arguing against in the interview.
So, you want to take that away from them?
Also I am wondering how you consider taking something that is freely given to be stealing?
Lol, that's not what I was talking about. I say health care is not a right, and you say that means I want to take away their right to life?
That right to life means no one can harm them - but it doesn't mean they have a right to health care. As for the stealing - people who say health care is a right demand it be provided for those who can't afford it - that means money to pay for it must be forcibly taken from others. That is the definition of stealing.
Crazed Rabbit
CountArach
06-09-2007, 05:20
Replace doctors with food and you've got exactly what this guy is arguing against in the interview.
Yes, but the infrastructure will remain with them, as well as the training that is provided.
I say health care is not a right, and you say that means I want to take away their right to life?
Do you think it is a coincidence that the Western World has far higher life expectancy and far greater healthcare capablities? The two go hand in hand. To take away healthcare is to take away a chance at a longer life.
As for the stealing - people who say health care is a right demand it be provided for those who can't afford it - that means money to pay for it must be forcibly taken from others. That is the definition of stealing.
I am not going to debate about whether a Public Healthcare system is better than a Private Healthcare system. This isn't the right thread. Suffice to say, I believe in a welfare state, and you most probably don't...
KafirChobee
06-09-2007, 07:24
Actually, isn't there a "Better Way" going on in Africa? Where a citizen of say America can sponsor (or simply contribute a few bucks to the project) a potential entreprenuer (sp) in some obscure village?
Depending on governments that have already demonstrated corruption, to improve the lives of their citizenry makes as much sense as owning a rooster and hoping for eggs.
It maybe time for the middle-class of the first-world to take it in their own hands to improve the lives of the 3rd, 4th & 5th worlds - as well as taking on their own nations tendencys to listen only to their wealthy.
The wealthy of the world have pretty much proven themselves to be exactly as marx depicted them. It is time for other factors to interceed on the factors of humanitarian aid - the wealthy drop a buck and think its enough. Giving people the incentive to be or make their own future, and you create a capitalist. Who needs more imperialists?
doc_bean
06-09-2007, 11:47
Actually, isn't there a "Better Way" going on in Africa? Where a citizen of say America can sponsor (or simply contribute a few bucks to the project) a potential entreprenuer (sp) in some obscure village?
That's the idea of micro-loans, a very popular technique (at least in the academic community) these days, but a lot of governments/organizations don't like it since they see it as immoral since western society benefits from it too. They prefer it if we just hand them stuff.
Philippus Flavius Homovallumus
06-09-2007, 12:12
Yes, but the infrastructure will remain with them, as well as the training that is provided.
Do you think it is a coincidence that the Western World has far higher life expectancy and far greater healthcare capablities? The two go hand in hand. To take away healthcare is to take away a chance at a longer life.
I am not going to debate about whether a Public Healthcare system is better than a Private Healthcare system. This isn't the right thread. Suffice to say, I believe in a welfare state, and you most probably don't...
It won't work, it's been tried. About twenty years ago my father helped deliver fork lifts and other "infastructure" to an African port (I can't remember which country and it probably doesn't exist anymore) in any case a year later they went back to discover that everything was just rusting on the tarmac.
With medicine it's worse as soon as you leave a local demagoue will come along and tell everyone that Western medicine will give them AIDs/make them infertile.
CountArach
06-09-2007, 22:46
Yes, but the thing is you train them in the uses of this equipment/medicine.
I googled the author of the article in the OP; he is no "economics expert". He was a teacher with a Bachelors degree in education but struck up correspondence with a US libertarian think tank a few years back and has since taken to prosletising:
http://www.mackinac.org/archives/2006/111806NYT-reed2.pdf
He has no formal economics training and seems to run a one man NGO, incapable of doing any empirical research. I would not take his assertions more seriously than anyone else's on the internet.
For example, his comments about AIDS and malaria are vacuous drivel. Anti-AIDS programmes are probably the highest return investments that can be made in the world today (at least that was the view of the real economics experts, including Noble prize winners, in the Copenhagen Consensus exercise a few year back). And action against malaria is one of the top priorities of most advocates of increased aid to Africa.
Lemur's original post poses some good questions:
Okay, so aid to Africa has been grossly mishandled, but is it really at the root of the stunted markets there? Isn't corruption and bad government more of an issue?
Indeed. The markets were stunted in the aftermath of independence, by misguided "African socialism" and/or kleptocratic states. The aid tended to follow Africa's stagnation, not precipitate it. Quite a few empirical studies find aid was ineffective in raising Africa's growth (some dispute that); I don't know of any serious ones concluding that it reduced growth.
Would it be possible for a form of aid to exist that did not stunt local markets and producers?
Well, I really can't see how paying for anti-retroviral drugs for HIV/AIDs or basic education for kids "stunts local markets and producers". I would have thought a healthy and well educated work force were rather good for the economy.
More generally, most aid these days is budget or import support - governments are funded in general, rather than food aid or specific projects funded. If the government is decent, this probably helps markets because it alleviates the need for high taxes and funds useful government services. If the government is bad, it is probably wasted but at least maintains some level of local demand.
And what's the upshot of a thriving economy if there's no rule of law?
In most cases, the two go together (maybe not China...).
If aid ever were stopped, maybe the "cold turkey" experience could shock the local politics and create the libertarian idyll that the original article's writer expects. For example, Uganda started cash budgeting in 1994 after a temporary stoppage of aid and it was that which killed the country's inflation. But then the Ugandan government was already pro-reform and headed by genuine African economic experts.
Alternatively, stopping the aid could just plummet the economy into being a fallen state. Stopping aid to Kenya periodically in the 1990s did not have the same results as in Uganda - the administration was just too hopless.
But Kenya could be a lot worse. Just look at what happened to its west coast counterpart, Cote d'Ivoire. The original article mentions cutting off aid to Rwanda, as well as some slander about Kagame killing a million people in Zaire. Do we really want to see the Interahamwe coming back with their matchettes?
https://forums.totalwar.org/vb/showthread.php?t=85069
Such as?
Things that are relativily expensive to grow here, cattle for example, but anything will do. Our farmers happy, their farmers happy.
doc_bean
06-11-2007, 09:34
Things that are relativily expensive to grow here, cattle for example, but anything will do. Our farmers happy, their farmers happy.
Cattle is a big problem in Africa due to the climate and disease, besides they'd need to import food for their cattle from us.
Cattle is a big problem in Africa due to the climate and disease, besides they'd need to import food for their cattle from us.
Good idea just got better then. Africa is a big place, I am sure there are parts that are suitable for cows. It was just an example, africa needs to set up export, and we should provide the means to do it. If they insist on growing what we dump they aren't getting anywhere.
The original article mentions cutting off aid to Rwanda, as well as some slander about Kagame killing a million people in Zaire. Do we really want to see the Interahamwe coming back with their matchettes?
cutting off aid will not ipso-facto result in machetes coming out.
the machetes (pangas as they are called in east africa) come out for a whole host of reasons, mostly resulting from tribal rivalry and power struggles.
doc_bean
06-11-2007, 11:59
If they insist on growing what we dump they aren't getting anywhere.
I think we agree here, somewhere.
The problem is they can't produce anything we can't produce better. There aren't many options, traditionally countries in such a situation would opt for protectionism, but that's not 'allowed' these days.
Good idea just got better then. Africa is a big place, I am sure there are parts that are suitable for cows. It was just an example, africa needs to set up export, and we should provide the means to do it. If they insist on growing what we dump they aren't getting anywhere.
Although your basic premise that we should be encouraging African nations to help themselves is correct, your claim that "they aren't growing what we want" is wide of the mark.
It is all down to uncompetitive prices rather than simply lack of demand.
Many African countries are perfectly capable of establishing an export market. The trouble with food export is that they can't compete cost and price-wise with Western subsidised agriculture, especially when that industry is encouraged to grow far more than is needed. In addition to this there are often regulatory barriers which prevent African farmers from being competive in, say, the European market.
In many ways the Western agricultural industry is just as much a market failure as African agriculture. If your business has to be shored up by massive subsidies and has to be protected from the influence of market forces then it has already failed.
The problem is they can't produce anything we can't produce better. There aren't many options, traditionally countries in such a situation would opt for protectionism, but that's not 'allowed' these days.
I think Africa could produce a lot of agricultural products much more cheaply than the EU, if the EU removed its agricultural subsidies and protection. A lot of European agriculture is horribly inefficient and would not survive in a free market. Africa has the potential to manufacture too, because labour is so much cheaper but there they are competing more with Asia than EU.
cutting off aid will not ipso-facto result in machetes coming out.
the machetes (pangas as they are called in east africa) come out for a whole host of reasons, mostly resulting from tribal rivalry and power struggles.
Indeed - my whole point is nothing in Africa is "ipso-facto". Africa is complicated. Simple prescriptions like "stop all the aid" are cartoon solutions. The case of Rwanda highlights the complexity. Where a country is working, but tetters on the edge of being a failed state, what do you do? Cut off all the aid and risk another genoicide? Or try to work to shore it up?
I suspect supporting "post-conflict" societies (e.g. Rwanda, Sierra Leone etc) is one of the most cost-effective types of aid you can have. Lots of armed young men wandering around with nothing to do and a lot of grudges. Finding work for them and rebuilding government institutions is a very sensible thing to do.
Many African countries are perfectly capable of establishing an export market. The trouble with food export is that they can't compete cost and price-wise with Western subsidised agriculture, especially when that industry is encouraged to grow far more than is needed. In addition to this there are often regulatory barriers which prevent African farmers from being competive in, say, the European market.
My point is that they shouldn't try to be competitive, they can't. Dumping cheap goods can be seen as aid, cheap food after all. They don't need extra rice/sugar whatever, there's plenty of it, why not try something else. We have a lot of africans in europe, maybe they alone are market enough on their own, I used to import clothes/art from Senegal to sell on the market in Amsterdam and it was pretty profitable. But there is always demand for fruit(so very expensive here), meat, and africa has some very rich grounds. Maybe some enterprisising westener could try to set up a few lines if they don't want it. All that dumping isn't that bad as long as we don't get in eachothers way. Win win situation.
KafirChobee
06-11-2007, 18:16
Remove government subsidies and our farmers are forced to compete in the real world, rather than producing whatever is profitable from the government agricultural welfare system created back in the 1930's to aid them. For instance the US government subsidies for "big cotton" - which inturn dumps its surplus on the world market thereby depressing the market and making it near impossible for 3rd world farmers that have no other crop to grow to exist above poverty levels.
http://steves.blogharbor.com/blog/_arcgives/2005/5/7/660561.html
Things change, farm subsidies are no longer needed - especially when 90% of them go to Agri-corporations.
Remove government subsidies and our farmers are forced to compete in the real world, rather than producing whatever is profitable from the government agricultural welfare system created back in the 1930's to aid them.
Indeed - if the article (and thread) had been titled "For God's sake, stop the subsidies", I think you would be hard-pressed to find a serious economic expert who could have disagreed. First world agricultural subsidies and protection are purely political in nature - which is also why they are so enduring.
But I think the US is a minor felon in this matter - it is the EU who is the big time offender.
ajaxfetish
06-11-2007, 22:34
No, not necessarily Western Doctors, but rather infrastructure. They need the Doctors to come in and train them. They will learn to provide for themselves at that point
As the saying goes: 'Light a fire for a man and he'll be warm for a day; light him on fire and he'll be warm for the rest of his life.'
Ajax
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